FARM: Thinking about going solar?

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The cost of solar panels has fallen by 50% in the past four years, while electricity costs have risen considerably in California. Before you purchase solar panels or enroll in a solar lease program, here are a few things to consider.

1. How much will going solar save me on my monthly electricity bill?

Solar lease programs advertise a monthly savings of 15% off your current monthly electricity rate. This rate is locked in for the length of the lease and will not rise with inflation. On the other hand, purchasing a solar system outright (costing an average of $15,000-$30,000) may take years to pay off.

2. Will installing solar panels add to my home’s value?

Yes, going solar may add to your home’s value. Nine out of ten homebuyers prefer to purchase an energy-efficient home even if the purchase price is two-to-three percent higher than a similar non-energy-efficient home, according to the National Association of Home Builders. However, a two-to-three percent price increase is not worth the $15,000-$30,000 investment in most cases. So is a zero-money down solar lease the solution? Maybe. But there are complications to consider with solar leases, as well.

3. Will a solar lease derail the sale of my home?

There have been cases of solar lease contracts putting a home sale on hold or even cancelling a sale. To avoid these complications:

ask the solar leasing company about the requirements for transferring a solar lease to a homebuyer before you sign a contract;

do the math to figure out if the monthly savings are worth the potential complications with the eventual sale; and

if you decide to go with a solar lease, disclose the solar lease to all potential homebuyers upfront to make sure it doesn’t become an issue before closing.

Contact me if you’re thinking about selling. I’ll give you a free estimate of your home’s value — with or without the solar panels!

5 Comments

Germian Seri
on March 12, 2016 at 1:33 am

I would like to expand on what William Sutro said,even though it was almost 4 years ago. As an agent you should be very careful to stick with what you know and not get caught up in this decade’s fashion. In California, Title 24 required new homes to have fluorescent lights in the kitchen and occupancy sensors in the baths. Now we have LED bulbs and those requirements wasted money and will waste more in the future. In Sacramento, we have a company that installs solar panels for free and sells the energy back to the homeowner, keeping the excess for themselves. The only advantage to the owner is they never pay a rate higher than tier one. They only save money in months where their use is excessive. Regardless of the program however, solar energy systems are rarely implemented effectively. In North American latitudes, solar panels will barely pay for themselves even when pointed directly at the sun all day. Winter days are too short, the sun’s azimuth is too low and too many days will be cloudy. All most installations involve fixed panels pointing in whatever direction and at whatever azimuth there is available roof space. I can’t tell you how many times I’ve advised customers their roof orientation is east and west those roofs will produce over 50% less than a south facing roof. The solar companies say they will just put panels on both sides. They’ll spend double the money to produce almost nothing. Very few people who did any math at all, would invested in solar panels if the price was not subsidized by the surcharges on their neighbor’s utility bills.

Mr. Sutro; I agree with most of your points, which is why fixed payment Solar Leasing makes more sense than buying a solar power (PV) system. Most homes are not built in the correct “Passive Design”. Most homes are unfortunately built to economics of fast/ cheap & retrofitting to passive may not be feasable, or may not be allowed due to HOA restrictions. Fixed pay, solar power leasing with all inclusive maintenance is the safe & smart way to FIX a recurring, ever rising & essential operating expense of a home.
current CA stats:Q1&Q2 2013: 82%Lease, 18%Purchase. Residential single family. Solar Power.
AJT
BA-Arch CPSLO
CADRE01114424
ASD Crew Lead
BPI certified building analyst

1 1/2 Yrs ago I put solar panels on my house in foggy Carmel. They came through SunRun and I paid nothing down, besides the rebates. I pay for the panels with a monthly payment of around $95. The maintenance is being taken care of by SunRun. After 18 years it will be paid off.
After the first 12 months I had saved already $600.00. At this rate and with electra going up in price, it’ll just keep getting better. Even with all the fog…

FIrst Tuesday should be very careful advocating solar energy. It is a capital investment which may take decades to yield net savings. You consistently toe the “green agenda” line, with no details as to the expenses involved. Homeowners should not be encouraged to make an investment in solar unless they are in “all electric” or electric and propane areas. The cost of one service call on an active solar system will exceed months worth of energy savings. Tread carefully when promoting something you may know nothing about. Just because you want what you think is best for the planet, doesn’t mean it is good for the homeowner. As I have suggested, have a contractor write a cost/benefit analysis on both urban and rural energy areas for the First Tuesday site. Agents and homeowners would benefit from learning the requisite nomenclature, and familiarizing themselves with some of the expenses. That would be a valuable service to FT readers. I spent 5 years working with builders, installing solar systems throughout California. Then I became a developer, and built multiple passive solar homes. Passive solar home design is the most cost-effective, most “green” way to reduce energy demand, and provides a far more comfortable home.